Inventory Declining at a Slower Pace

When home prices rise it induces more homeowners to put their homes up for sale. More inventory equals lower prices or at the least slower price increases. Please read the article below and let me know what you think.

Home inventories continue to decline in many markets across the country, but the pace of those declines appears to be slowing, which may in turn slow price appreciation in some markets, according to Realtor.com, a San Jose, California-based real estate website operated by Move Inc.

“Dramatic national year-over-year inventory declines have evaporated,” Realtor.com said in its National Housing Trend Report released Tuesday.

National housing inventory declined 5.24 percent year-over-year in July, which is a slowdown from the 16.47 percent year-over-year decline reported in January.

At the same time, the number of markets with declining inventory year-over-year decreased to 118 in July, down from 125 markets in June.

Previously, many of the fastest inventory declines were taking place in California markets, but in July, California did not make any appearances on the list of top five markets with greatest inventory declines.

The markets making up this list include Detroit, Michigan; Boston, Massachusetts; Denver, Colorado; Honolulu, Hawaii; and Naples, Florida. These markets demonstrated inventory declines ranging from 23 to 30 percent.

The notable inventory declines in these markets “suggests the beginning of a housing market recovery process similar to what was observed in Florida in 2011, and California in 2012 and 2013,” according to Realtor.com.